In a statement released today, Sony said that the European systems will …

On March 23, the Playstation 3 comes to Europe. The reports from Europe have shown strong interest in the system via preorders at stores, but Sony has released some troubling news in advance of the launch: newer Playstation 3 consoles may suffer reduced backwards compatibility compared to existing North American and Japanese units.

In a statement released today, Sony said that the European systems will utilize "a new hardware specification," and Sony won't "concentrate on PS2 backwards compatibility." Rather, they are "increasingly focused on developing new games and entertainment features exclusively for PS3, truly taking advantage of this exciting technology." What does this mean in plain English? Sony is looking to decrease the production cost of the Playstation 3, and they have opted to replace dedicated hardware with software that will replace its functionality. The hardware had been providing full backwards compatibility of PS2 games, but Sony makes it clear that the new configuration will not offer the same level of support. "Certain PlayStation 2 format software titles may not perform properly on this system," the statement reads.

Sony says that more information will become available on March 23, and right now their backwards compatibility page on their European site is down. They also claim that post-launch updates will allow more games to be added to the backwards compatibility list, a move that mirrors Microsoft's much-lamented 360 backwards compatibility plan. It seems like we may be in the dark about which games will play in the newly reconfigured Playstation 3 until after launch.

It's unclear how many people factor backwards compatibility into their buying decisions, but this is a feature that Sony has historically used to push their new systems; the PS2's ability to play every PSone game made it easy for customers to stay loyal as they traded their older system in for the newer PS2. If the ability is severely limited this move may also upset retailers hoping for a flood of inexpensive PS2 systems to sell through their stores.

This could be bad news for European gamers, but it's worth noting that if Sony was able to save money by cutting hardware out of the Playstation, it's unlikely the new hardware specification will be limited to the European market. Are first-generation PS3s with a greater ability to play classic games headed for collector's status as new shipments arrive lacking hardware? It remains to be seen. Sony has just removed a significant Playstation 3 feature; they may face a harder challenge cracking the European market than was originally thought.